Local spirits offer change of pace amid consolidating industry

Sometimes you want to savor a Maker's Mark — or a maker's mark

January 14, 2014|Phil Rosenthal

Paul Hletko, founder and master distiller of FEW Spirits, LLC in Evanston tastes the rye whiskey as he gives a tour and talks about his business seen here in Evanston on Thursday, April 19, 2012. (Jos? M. Osorio / Chicago Tribune)

When you order a shot of Koval single-barrel, organic bourbon whiskey, instead of, say, Maker's Mark, it's as much a statement as a request.

It's a drink, yes, but also an experience. It gives you something to talk about. Maybe the appeal is in how its corn mash is complemented with gluten-free millet rather than the usual rye or wheat. Perhaps you rhapsodize about the peppery caramel finish with just a lingering hint of clove-spiked tobacco. It's possible that what you savor most is the status of connoisseur this knowledge confers.

This week's $16 billion Suntory deal for Deerfield-based Jim Beam, whose multitude of brands includes Maker's, further consolidates the spirits business. But it deepens the niche being carved by a growing number of small-batch distillers such as Chicago-based Koval, Few Spirits in Evanston and North Shore Distillery near Lake Bluff, doing for their industry what microbreweries, designer hotels, and artisanal foods and crafts have in theirs.

Maker's Mark is good bourbon, but it's everywhere. The exclusivity of sipping a small, independent brand produces its own kick.

"We've gotten so globalized that you can go anywhere in America and it's all the same from Dakota all the way to Miami all the way to LA," said Sonat Birnecker, who founded Koval Distillery with her husband, Robert, six years ago in a building where air ducts once were made.

"One of the things that's wonderful, not just about the artisan spirits industry, but the whole artisans movement that has been developing the last few years … is it's nice to have more of a regional flair again, where things are different in different places."

It's part of a fine tradition in America, predating the United States. A still produced whiskey from corn and rye grown at George Washington's Mount Vernon plantation to complement his milling business. It was yielding 11,000 gallons of whiskey a year when he died in 1799.

We tend to associate small-batch stills with Prohibition bootlegging, but there's been a resurgence in recent years. Industry sources say the number of independent distilleries doubled in this country between early 2010 and mid-2012, and it has more than doubled again in the time since, outpacing the growth of breweries and wineries.

There are around 400 small distilleries in the United States today, producing gin, vodka, bourbon, rum and other spirits. Their total output is but a 1 percent or 2 percent sliver of the overall volume, but it's growing. For the major distilleries, growth has been hard to find, except at the high end.

That's part of what made Beam, with a full range of products at various price points and cachet, so attractive to Suntory. But the little guys, who can't really afford to sell anything less than a premium product, benefit as well.

"It's a big fish getting eaten up by an even bigger fish and we're a guppy," said North Shore's Sonja Kassebaum. "But at the same time, it does help to spotlight the gulf between these gigantic multinational companies and little artisans like us."

"There's an experience and a story we aim to provide," Kassebaum said. "There's a reason for the decisions we make, and it wasn't (trying to figure out how to) manipulate this to sell 100 million cases. It's how do I make the very best thing I can with my own two hands?"

Kassebaum, a onetime lawyer and self-described "cocktail nerd," was at the forefront of the artisan spirits trend when she and her husband, Derek, an entrepreneur with a degree in chemical engineering, launched North Shore about a decade ago in an industrial park.

"Everyone we encountered was afraid we'd blow up, because stills can do that," she recalled, but it's the craft spirits business that exploded.

"We've gotten to a place where we're modestly profitable, but we've worked at it for a long time and we're playing a long-term game," Kassebaum said, estimating there are about 20 distilleries scattered around Illinois.

Many would-be distillers train at Koval with the Birneckers, who realize that there is considerable danger posed to the craft sector by people who bring inferior product to market, potentially souring consumers on taking a chance on a brand they don't immediately recognize. It's also in the overall industry's interest for people to pay more attention so they understand why they might want to pay more money.

"People are becoming educated when it comes to spirits," said Sonat Birnecker, who used to be a professor in German Jewish culture. "They're looking at what's happening in their local community, they're excited about local beer, and that translates to excitement for local spirits. … (Koval makes) spirits that are different to allow people the excitement of discovering something that isn't being done anywhere else. That's something small independent brands are able to do and do well with the right training and right vision."